Profit Using Accounting Costs Profit Using Opportunity Costs Total Revenue Cost Nail technicians Owner's Salary Depreciation Allowance $700,000 Total Revenue Cost Nail technicians Owner's Time $700,000 A Cost of using building and lequipment opportunity cost) $25,000 Total Cost Total Profit Happy Nails is a locally owned nail salon that is in its first year of business. The nail salon employs 8 nail technicians that are paid $31,250 each and the owner's is paid $75,000. If the owner did not own Happy Nails, she would work for a competitor for $85,000. At the beginning of the year, the building and the salon equipment are worth $100,000 and at the end of the year, they are worth $85,000. The accountant for Happy Nails uses straight-line depreciation for the 15-year life of the building and salon equipment. The table above provides some additional information on revenue and the opportunity cost of using the building and equipment. Total Cost Total Profit Refer to the table above. What is the value of A? O $31,250 $312.500 O $250.000 O $62.500

Profit Using Accounting Costs Profit Using Opportunity Costs Total Revenue Cost Nail technicians Owner's Salary Depreciation Allowance $700,000 Total Revenue Cost Nail technicians Owner's Time $700,000 A Cost of using building and lequipment opportunity cost) $25,000 Total Cost Total Profit Happy Nails is a locally owned nail salon that is in its first year of business. The nail salon employs 8 nail technicians that are paid $31,250 each and the owner's is paid $75,000. If the owner did not own Happy Nails, she would work for a competitor for $85,000. At the beginning of the year, the building and the salon equipment are worth $100,000 and at the end of the year, they are worth $85,000. The accountant for Happy Nails uses straight-line depreciation for the 15-year life of the building and salon equipment. The table above provides some additional information on revenue and the opportunity cost of using the building and equipment. Total Cost Total Profit Refer to the table above. What is the value of A? O $31,250 $312.500 O $250.000 O $62.500

Name: Profit Using Accounting Costs Profit Using Opportunity CostsTotal Rev
Uploaded: 2024-03-20T06:32:49.000Z
Channel: Bartleby
Description: Profit Using Accounting Costs Profit Using Opportunity CostsTotal Revenue$700,000 Total Revenue$700,000CostNail techniciansOwner's SalaryDepreciationAllowanceCostNail techniciansOwner's TimeCost of using building andequipmentKopportunity cost)AAD.$2

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter2: Basic Managerial Accounting Concepts

Section: Chapter Questions

Problem 34BEB: Service Organization Income Statement Healing Hands Massage Hut offers high-end, specialized...

See similar textbooks

Similar questions

Service Organization Income Statement Healing Hands Massage Hut offers high-end, specialized massages and grooming services, including manicures, pedicures, facials, and full-body massages. Healing Hands is a new startup service organization that generates monthly sales of 200,000. As a startup organization, Healing Hands spends 5,000 a month on advertising in local newspapers and on social media sites. In addition, each month Healing Hands spends 100,000 to pay its team of highly specialized massage therapists, and 10,000 to a technology company (to handle the companys website, massage appointment scheduling activities, and customer communications). Further, the company incurs a 15,000 monthly expense to rent its hut space in a hip new retail market. Finally, Healing Hands incurs 20,000 of monthly administrative expenses. Required: 1. Prepare an income statement for Healing Hands for the past month. 2. Briefly explain why Healing Hands income statement has no line item for cost of goods sold.
Jean and Tom Perritz own and manage Happy Home Helpers, Inc. (HHH), a house-cleaning service. Each cleaning (cleaning one house one time) takes a team of three house cleaners about 1.5 hours. On average, HHH completes about 15,000 cleanings per year. The following total costs are associated with the total cleanings: Required: 1. Calculate the prime cost per cleaning. 2. Calculate the conversion cost per cleaning. 3. Calculate the total variable cost per cleaning. 4. Calculate the total service cost per cleaning. 5. What if rent on the office that Jean and Tom use to run HHH increased by 1,500? Explain the impact on the following: a. Prime cost per cleaning b. Conversion cost per cleaning c. Total variable cost per cleaning d. Total service cost per cleaning
Cost Identification and Analysis, Cost Assignment, Income Statement Melissa Vassar has decided to open a printing shop. She has secured two contracts. One is a 5-year contract to print a popular regional magazine. This contract calls for 5,000 copies each month. The second contract is a 3-year agreement to print tourist brochures for the state. The state tourist office requires 10,000 brochures per month. Melissa has rented a building for 1,400 per month. Her printing equipment was purchased for 40,000 and has a life expectancy of 20,000 hours with no salvage value. Depreciation is assigned to a period based on the hours of usage. Melissa has scheduled the delivery of the products so that two production runs are needed. In the first run, the equipment is prepared for the magazine printing. In the second run, the equipment is reconfigured for brochure printing. It takes twice as long to configure the equipment for the magazine setup as it does for the brochure setup. The total setup costs per month are 600. Insurance costs for the building and equipment are 140 per month. Power to operate the printing equipment is strongly related to machine usage. The printing equipment causes virtually all the power costs. Power costs will run 350 per month. Printing materials will cost 0.40 per copy for the magazine and 0.08 per copy for the brochure. Melissa will hire workers to run the presses as needed (part-time workers are easy to hire). She must pay 10 per hour. Each worker can produce 20 copies of the magazine per printing hour or 100 copies of the brochure. Distribution costs are 500 per month. Melissa will receive a salary of 1,500 per month. She is responsible for personnel, accounting, sales, and productionin effect, she is responsible for administering all aspects of the business. Required: 1. What are the total monthly manufacturing costs? 2. What are the total monthly prime costs? What are the total monthly prime costs for the regional magazine? For the brochure? 3. What are the total monthly conversion costs? Suppose Melissa wants to determine monthly conversion costs for each product. Assign monthly conversion costs to each product using direct tracing and driver tracing whenever possible. For those costs that cannot be assigned using a tracing approach, you may assign them using direct labor hours. 4. Melissa receives 1.80 per copy of the magazine and 0.45 per brochure. Prepare an income statement for the first month of operations.
ALLOCATING OPERATING EXPENSEMILES DRIVEN Herbert Quiong owns a furniture store that offers free delivery of merchandise delivered within the local area. Mileage records for the three sales departments are as follows: The cost of using the truck for the last year, including depreciation, was 5,000. Allocate the cost of the truck among the three departments on the basis of miles driven.
Jean and Tom Perritz own and manage Happy Home Helpers. Inc. (HHH), a house-cleaning service. Each cleaning (cleaning one house one time) takes a team of three house cleaners about 1.5 hours. On average, HHH completes about 15,000 cleanings per year. The following total costs are associated with the total cleanings: Next year, HHH expects to purchase 25,600 of direct materials. Projected beginning and ending inventories for direct materials are as follows: There is no work-in-process inventory and no finished goods inventory; in other words, a cleaning is started and completed on the same day. Required: 1. Prepare a statement of cost of services sold in good form. 2. How does this cost of services sold statement differ from the cost of goods sold statement for a manufacturing firm?
Glass time repairs chips in car windshields. The company incurred the following operating cost for the month of March 2024 Glass time earned $28,000 in service revenues for the month of March by repairing 250 windshields. All cost shown are considered to be directly related to the repair service. 1) prepare an income statement for the month of March 2) compute the cost per unit of repairing one windshield 3) the manager of glass time must keep the unit operating costs below $60 per windshield in order to get his bonus. Did he meet the goal?
Oriole provides enivronmentally friendll laswn services for homeownders. Its operating costs are as follows: depreciation (straight-line) $1500 per month advertising $400 per month insurance $3560 per month weed and feed materials $24 per lawn dircet labor $3 per lawn fuel $1 per lawn Oriole charges $80 per treatment for the average single family lawn. For the month ended July 31, 2022, the company had total sales of $9600. Prepare a CVP Income statement for the month ended July 31,2022.
The following is cost information for the Creamy Crisp Donut Company:Entrepreneur's potential earnings as a salaried worker = $50,000Annual lease on building = $22,000Annual revenue from operations = $380,000Payments to workers = $120,000Utilities (electricity, water, disposal) costs = $8,000Value of entrepreneur's talent in the next best entrepreneurial activity = $80,000Entrepreneur's forgone interest on personal funds used to finance the business = $6,000 Refer to the above data. If, other things equal, Creamy Crisp's revenue fell to $286,000: its implicit costs, including a normal profit, would exceed its explicit costs.B. it would earn a normal profit but not an economic profit.C. it would suffer an economic loss.D. its accounting profit would fall to zero.
The following is cost information for the Creamy Crisp Donut Company:Entrepreneur's potential earnings as a salaried worker = $50,000Annual lease on building = $22,000Annual revenue from operations = $380,000Payments to workers = $120,000Utilities (electricity, water, disposal) costs = $8,000Value of entrepreneur's talent in the next best entrepreneurial activity = $80,000Entrepreneur's forgone interest on personal funds used to finance the business = $6,000 Refer to the above data. Creamy Crisp's implicit costs, including a normal profit are: $136,000.B. $150,000.C. $94,000.D. $156,000.
1. Categorize each of the following as a fixed expense or a variable expense. 1) CFO salary, $600,000 a year 2) Sales associates receive a commission of $6 for each unit sold 3) Material used to make the product costs $10 a unit 4) Accountant’s fees, $8,000 for the year 5) Rent is $50,000 for the year
Solve the following problem in good accounting form. Last year, Stone Builders, Inc. started work on a P10,600,000 constructioncontract which was completed this year. It has consistently used the percentage of completion method of recognizing income. Accounting data provided last year were as follows: Debit: Progress Billings P4,300,000; Credits: Cost incurred 3,450,000 Collections 3,900,000 Estimated cost to complete 3,630,000. What amount of this contract was recognized last year?
Blossom provides environmentally friendly lawn services for homeowners. Its operating costs are as follows. Depreciation (straight-line) $1,500 per month Advertising $350 per month Insurance $3,610 per month Weed and feed materials $20 per lawn Direct labor $7 per lawn Fuel $1 per lawn Blossom charges $80 per treatment for the average single-family lawn. For the month ended July 31, 2022, the company had total sales of $9,600.